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Educational Development Corp (EDUC) SEC Filing 8-K Material Event for the period ending Wednesday, October 6, 2021

Educational Development Corp

CIK: 31667 Ticker: EDUC

 

EXHIBIT 99.1

PRESS RELEASE

 

EDUCATIONAL DEVELOPMENT CORPORATION

ANNOUNCES FISCAL YEAR 2022 SECOND QUARTER AND YEAR-TO-DATE RESULTS

 

TULSA, OK, October 6, 2021—Educational Development Corporation (“EDC”, or the “Company”) (NASDAQ: EDUC) (http://www.edcpub.com) today reports financial results for the second quarter and year-to-date ended August 31, 2021.

 

Pre-COVID, COVID Impacted and Current Year Comparison

 

“As a result of the pandemic, 2020 was a very unusual year for all companies. Ours was no exception. Fortunately, we saw an increase in demand for our products, and we were poised and ready to meet the opportunity. This demand anomaly resulted in record sales and record earnings,” stated Craig White, President and CEO of Educational Development Corporation.

 

“This year, as the pandemic restrictions have lessened, we had a more typical second quarter. Historically, our second quarter is one of our lowest revenue quarters of the year due to the seasonal nature of our business. During the second quarter of last year we experienced a significant increase in the demand for our educational products as parents navigated the COVID-19 pandemic travel restrictions as well as teaching in the home,”

 

“Due to the significant positive impact of the COVID-19 pandemic on our business last year, we are providing the additional table below to show pre-COVID, COVID-impacted and current financial results for the fiscal second quarter and year-to-date results ended August 31:”

 

   

Pre-COVID

 

Pre-COVID

 

COVID Impacted

 

COVID Impacted

 

Current Year

 

Current Year

Period

 

Q2 FY 2020

 

YTD FY 2020

 

Q2 FY 2021

 

YTD FY 2021

 

Q2 FY 2022

 

YTD FY 2022

Average # of Consultants

 

33,600

 

32,600

 

45,400

 

39,300

 

46,100

 

50,200

Net Revenues

 

24,438,000

 

52,025,400

 

59,250,100

 

97,541,800

 

32,994,400

 

73,802,300

Net Earnings

 

1,007,600

 

2,371,200

 

4,255,000

 

6,186,100

 

1,898,200

 

5,336,300

After tax profit %

 

4.1%

 

4.6%

 

7.2%

 

6.3%

 

5.8%

 

7.2%

 

“Sales from our UBAM division continue to be driven by our active consultant count. This quarter the Company had more active consultants, which translated into increased revenues over fiscal year 2020 results. When compared to the year prior to COVID-19, UBAM revenues for our second fiscal quarter were 35.8% greater than the second quarter of fiscal year 2020 and UBAM’s year-to-date revenues were 42.9% higher than the year-to-date revenues of fiscal year 2020. This growth, compared to fiscal year 2020, clearly demonstrates the continued success in generating sales from our consultant salesforce. The Company expects to see this trend continue into the third quarter.”

 

“Sales from our Publishing division continued to rebound in the second quarter as sales increased $1.2 million, or 52.2%, over the sales from the second quarter last year. Publishing division’s sales in the second quarter last year were negatively impacted by store closures associated with the COVID-19 pandemic.”

 

“During the second quarter we generated $2.7 million of pretax profits, approximately 8.1% of net revenues. This strong profit level results from our consistent business model, our attention to cost containment and last year’s restructuring of our outbound freight program. We expect these strong results to continue for the remainder of the fiscal year and beyond,” concluded Mr. White.

 

Once again, the board approved a quarterly cash dividend of $0.10 per share, which will be paid on, or around, December 9, 2021 to shareholders of record on November 18, 2021.

 

 

 

Year-to-Date Highlights Compared to the Prior Year

 

 

Net revenues of $73.8 million, a decrease of $23.7 million, or 24.3%, compared to $97.5 million.

 

Average active UBAM sales consultants totaled 50,200.

 

Earnings before income taxes were $7.3 million, a decrease of $1.1 million, or 13.1%, compared to $8.4 million.

 

Net earnings totaled $5.3 million, compared to $6.2 million, a decrease of $0.9 million, or 14.5%.

 

Earnings per share totaled $0.63, compared to $0.74, down 14.9% on a fully diluted basis.

 

Second Quarter Highlights Compared to the Prior Year Second Quarter

 

 

Net revenues of $33.0 million, a decrease of $26.3 million, or 44.4%, compared to $59.3 million.

 

Average active UBAM sales consultants totaled 46,100.

 

Earnings before income taxes were $2.7 million, a decrease of $3.1 million, or 53.4%, compared to $5.8 million.

 

Net earnings totaled $1.9 million, compared to $4.3 million, a decrease of $2.4 million, or 55.8%.

 

Earnings per share totaled $0.23, compared to $0.51, down 54.9% on a fully diluted basis.

 

EDUCATIONAL DEVELOPMENT CORPORATION

CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)

 

 
   

Three Months Ended

August 31,

   

Six Months Ended

August 31,

 
   

2021

   

2020

   

2021

   

2020

 
                                 

NET REVENUES

  $ 32,944,400     $ 59,250,100     $ 73,802,300     $ 97,541,800  
                                 

EARNINGS BEFORE INCOME TAXES

    2,658,100       5,799,500       7,318,700       8,443,400  
                                 

INCOME TAXES

    759,900       1,544,500       1,982,400       2,257,300  

NET EARNINGS

  $ 1,898,200     $ 4,255,000     $ 5,336,300     $ 6,186,100  
                                 

BASIC AND DILUTED EARNINGS

                               

  PER SHARE:

                               

     Basic

  $ 0.24     $ 0.51     $ 0.66     $ 0.74  

     Diluted

  $ 0.23     $ 0.51     $ 0.63     $ 0.74  
                                 

DIVIDENDS PER SHARE

  $ 0.10     $ 0.06     $ 0.20     $ 0.12  
                                 

WEIGHTED AVERAGE NUMBER OF

                               

  COMMON AND EQUIVALENT SHARES

                               

  OUTSTANDING:

                               

     Basic

    8,028,594       8,354,214       8,028,929       8,353,319  

     Diluted

    8,435,348       8,354,214       8,458,664       8,353,319  

 

EDC will host its Second Quarter Fiscal 2022 Earnings Call, including a live Q&A webcast, on Thursday, October 7, 2021 at 3:00 PM CT (4:00 PM ET). Craig White, Chief Executive Officer and President, Heather Cobb, Chief Sales and Marketing Officer, Dan O’Keefe, Chief Financial Officer and Secretary, and Randall White, Executive Chairman, will present the Company’s second quarter results and be available for questions following the presentation. Phone lines for participants will be available at (855) 639-3876. The conference ID is 7783245. Audio replays will be available following the event at www.edcpub.com/investors.

 

 

 

 

About Educational Development Corporation (EDC)

 

EDC is a publishing company specializing in books for children. EDC is the exclusive United States trade co-publisher of the line of educational children’s books produced in the United Kingdom by Usborne Publishing Limited (“Usborne”) and we also exclusively publish books through our ownership of Kane Miller Book Publisher (“Kane Miller”); both international award-winning publishers of children’s books. EDC’s current catalog contains over 2,000 titles, with new additions semi-annually. Both Usborne and Kane Miller products are sold via 4,000 retail outlets and by independent consultants, who hold book showings in individual homes, through social media, book fairs with school and public libraries, direct and internet sales. 

 

Contact:

Educational Development Corporation

Craig White, (918) 622-4522

 

Investor Relations:

Three Part Advisors, LLC

Steven Hooser, (214) 872-2710

 

Cautionary Statement for the Purpose of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995.

 

The information discussed in this Press Release includes “forward-looking statements.” These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “continue,” “potential,” “should,” “could,” and similar terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties and we can give no assurance that such expectations or assumptions will be achieved. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our success in recruiting and retaining new consultants, our ability to locate and procure desired books, our ability to ship the volume of orders that are received without creating backlogs, our ability to obtain adequate financing for working capital and capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, the COVID-19 pandemic, as well as those factors discussed in our Annual Report on Form 10-K for the year ended February 28, 2021, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere in our Annual Report on Form 10-K for the year ended February 28, 2021 and speak only as of the date of this Press Release. Other than as required under the securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.

 

 


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

CURRENT REPORT

 


 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 6, 2021 (October 6, 2021)

 

EDUCATIONAL DEVELOPMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

000-04957

73-0750007

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(I.R.S Employer Identification No.)

 

5402 S 122nd E Avenue, Tulsa, Oklahoma 74146

(Address of principal executive offices and Zip Code)

 

(918) 622-4522

(Registrants telephone number, including area code)

 

                                                                           

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Common Stock, $.20 par value

EDUC

NASDAQ

(Title of class)

(Trading symbol)

(Name of each exchange on which registered)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 ☐

 

 

 

 

The information disclosed in these Items 2.02, 7.01, 8.01 and 9.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.

 

ITEM 2.02         RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On October 6, 2021, Educational Development Corporation announced, via press release, fiscal year 2022 second quarter and year-to-date results. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

 

ITEM 7.01         REGULATION FD DISCLOSURE

 

On October 6, 2021, Educational Development Corporation announced, via press release, fiscal year 2022 second quarter and year-to-date results. Educational Development Corporation’s second quarter fiscal 2022 earnings call will be held on October 7, 2021 at 3:00 PM CT (4:00 PM ET). A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

 

ITEM 8.01         OTHER EVENTS

 

On October 6, 2021, Educational Development Corporation declared, via press release, a quarterly dividend of $0.10 per share. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

 

ITEM 9.01         FINANCIAL STATEMENTS AND EXHIBITS

 

(d)         EXHIBITS

 

Exhibit
Number

Description

99.1

Press release dated as of October 6, 2021

104

Cover Page Interactive Data File (formatted as Inline XBRL)

 

 

 

 

SIGNATURE

 

 

Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Educational Development Corporation

 

By:            /s/ Craig M. White         

              Craig M. White

              President and Chief Executive Officer

 

 

Date:         October 6, 2021

 
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Educational Development Corp provided additional information to their SEC Filing as exhibits

Ticker: EDUC
CIK: 31667
Form Type: 8-K Corporate News
Accession Number: 0001185185-21-001450
Submitted to the SEC: Wed Oct 06 2021 5:01:17 PM EST
Accepted by the SEC: Wed Oct 06 2021
Period: Wednesday, October 6, 2021
Industry: Wholesale Miscellaneous Nondurable Goods
Events:
  1. Earnings Release
  2. Financial Exhibit
  3. Other Events
  4. Regulated Disclosure

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